Manufacturing Jobs Growth is Best Since 1995

Nellie Chapman
|
07 October, 2018, 20:43

This is the sixth straight month the unemployment rate has been at or below four percent, also the best in a half century. and unemployment rates continue to hover near record lows. For close to two-thirds of the U.S. population, this is the lowest unemployment rate in their lifetime. Last month marked the 97th consecutive month of this job growth. A gauge of both unemployment and underemployment rose 0.1 point to 7.5 percent. However, broader measure of labour market slack, which includes people working part-time because they can not find a full-time post, edged up to 7.5 per cent from 7.4 per cent in August.

In September, the labor force participation rate remained at 62.7 percent, and the employment-population ratio, at 60.4 percent, was little changed. The Labor Department said non-farm payroll employment climbed by 134,000 jobs in September, while street had expected an increase of about 185,000 jobs.

After upward revisions for nonfarm payroll employment in July and August, monthly job gains have averaged 190,000 over the past three months.

And many analysts see the unemployment rate continuing to decline this year, ramping up pressure on wages and prices.

Canada as a whole added 229,100 jobs in September of 2017 compared to September 2018. Our research shows that the potential labor supply is sizable and elastic, especially along prime working-age persons.

The bottom line is that the extraordinary strength in the American jobs market remains in full force. At the end of 2012, average hourly earnings were $23.73, and they were $23.25 at the end of 2011. The economy created 201,000 new jobs even though employment fell by 3,000 in manufacturing (one fears this is the leading edge of the fallout due to tariff increases). The 2018 year-to-date gain is 189,000 compared to 207,000 for 2017. Jobs in leisure and hospitality (-17,000), education and health services (+18,000), retail (-20,000), and wholesale trade (+4,000) underperformed, while jobs in transportation and warehousing (+24,000), financial (+13,000), professional and business services (+54,000) were strong.

A cornerstone of Trump's economic policy is strengthening automobile manufacturing in the United States. The views expressed in this column are the author's own and do not reflect those of Berenberg Capital Markets, LLC.